No change in tax-exempted income threshold for individuals

The government has decided not to bring any change to seven tax rates, which include tax-exempted income-threshold for individual tax payers.

The areas are: fiscal adequacy, equity and fairness, facilitating business and growth, social responsibility, increasing tax compliance and combating tax evasion, adopting international best practices, and simplification of tax system and increasing the effectiveness of tax laws.

Last year, the tax-exempted income-threshold for individual tax payers was Tk 2.50 lakh and there was an opportunity to change this threshold for various types of taxpayers.

The tax exemption ceiling for women and senior citizen aged 65 years or above Tk 3 lakh, person with disability Tk 3.75 lakh and war-wounded gazetted freedom fighters Tk 4.25 lakh.

“In the next year, I propose not to bring any change in these tax rates,” Finance Minister AMA Muhith said while placing his 10th budget at the parliament today.

Taxpayer, who has a taxable income, and belongs to any of the city corporations of Dhaka North, Dhaka South, or Chittagong is currently paying Tk 5,000 as minimum tax. It is Tk 4,000 for taxpayers from other city corporations. And the rest of the taxpayers in the country are paying Tk 3,000 as minimum tax.

“I propose these rates to remain the same for the next year as well,” said the minister.

Special Tax Benefit for the Disabled

While pacing his budget proposals, the finance minister today said the government is committed to include people with disability in the mainstream of the society. To support employees with disability, the minister proposed to extend the perquisite limit for the employer of a disabled employee to Tk 25 lakh.

“Moreover, I propose medical allowances up to Tk 10 lakh to be tax exempted for a disabled employee,” he said.

Company Tax Rates

The existing tax rate for publicly traded companies is 25 percent, and for non-publicly traded companies is 35 percent. It is a bit higher for some specific sectors.

“The tax rates in Bangladesh remained in a very rational level and as such I propose these rates to remain the same,”

The minister proposed to harmonise tax rates for all tobacco goods-manufacturing companies to be at the same level of tax rate of the cigarette companies which is currently 45 percent.